Why do individuals become entrepreneurs? Why do some succeed? We propose two theories in which information frictions play a central role in answering these questions. Empirical analysis of longitudinal samples from the United States and the United Kingdom reveals the following patterns: (a) entrepreneurs have higher cognitive ability than employees with comparable education, (b) employees have better education than equally able entrepreneurs, and (c) entrepreneurs' earnings are higher and exhibit greater variance than employees with similar education. These and other empirical tests support our asymmetric information theory of entrepreneurship that when information frictions cause firms to undervalue workers lacking traditional credentials, workers' quest to maximize their private returns drives the most able into successful entrepreneurship.
Managerial Summary
Steve Jobs, Bill Gates, Mark Zuckerberg, Rachael Ray, and Oprah Winfrey are all entrepreneurs whose educational qualifications belie their extraordinary success. Are they outliers or do their examples reveal a link between education and success in entrepreneurship? We argue that employers assess potential workers based on their educational qualifications, especially early in their careers when there is little direct information on work accomplishments and productivity. This leads those who correctly believe that they are better than their résumés show to become successful entrepreneurs. Evidence from two nationally representative samples of workers (from the United States and the United Kingdom) supports our theory, which applies to equally to the immigrant food vendor lacking a high school diploma as well as the PhD founder of a science‐based startup.
论文原文：Deepak Hegde, Justin Tumlinson. Information frictions and entrepreneurship. Strategic Management Journal,2021,42(3),491-528. https://doi.org/10.1002/smj.3242.
We consider the link between firms' decisions to adopt a CSR executive position and the political ideology of prior adopter CEOs. We theorize that firms are more likely to adopt a CSR executive position when it has been previously adopted by conservative‐leaning CEOs at other firms, as opposed to liberal‐leaning CEOs. This effect is due, we argue, to the increased perceptual salience and situational attributions associated with ideologically incongruent actions (i.e., actions that appear inconsistent with known political values). We further posit that these effects are stronger when the observing firms experience increased salience of CSR issues due to shareholder pressure and institutional equivalence between the referent and the observing firms. We find support for these ideas in a longitudinal sample of Fortune 500 companies.
Managerial Summary
How do CEOs' values affect industry‐wide appointments of senior executives in charge of Corporate Social Responsibility (CSR)? Prior research suggests that liberal political beliefs of CEOs predict their CSR commitments. Our study explores how the political beliefs of CEOs—in this case, CEOs who have created a new CSR executive position in their companies—influence the likelihood that peer CEOs will imitate their decisions. Specifically, we find that when conservative CEOs adopt a CSR executive position, other companies are more likely to follow than when liberal‐leaning CEOs do so. These effects are even stronger when companies are experiencing CSR‐related pressure from shareholders and when they belong to the same industry and community as the firms of the CEOs they are observing.
论文原文：Abhinav Gupta, Anna Fung, Chad Murphy. Out of character: CEO political ideology, peer influence, and adoption of CSR executive position by Fortune 500 firms. Strategic Management Journal,2021,42(3),529-557. https://doi.org/10.1002/smj.3240.
How emotions impact firm valuation is empirically understudied because affective traits are difficult to quantify. However, using artificial emotional intelligence, positive and negative affects can be identified from facial muscle contraction‐relaxation patterns obtained from public CEO photos during initial coin offerings, that is, blockchain‐based issuances of cryptocurrency tokens to raise growth capital. The results suggest that CEO affects impact firm valuation in two ways. First, CEOs' own firm valuations conform more to those of industry peers if negative affects are pronounced (conformity mechanism). Second, investors use CEO affects as signals about firm value and discount when negative affects are salient (signaling mechanism). Both mechanisms are stronger in the presence of asymmetric information.
Managerial Summary
The purpose of this paper is to advance our understanding of how CEOs' affective traits influence firm valuation by both, CEOs themselves and investors. The effect of CEO emotions is plausibly particularly pronounced for start‐up firms, whose success prospects critically depend on their leaders. My results suggest that CEO emotions impact underpricing in initial coin offerings twofold. First, negative emotions are associated with CEOs choosing an underpricing level that closely conforms to their peer firms' average. Second, investors react to negative CEO emotions by demanding higher discounts on firm value. These effects are more pronounced when there is relatively little public information about the ICO firm. My paper is accompanied by artificial emotional intelligence software for implementation in practice and future research.
论文原文：Paul P. Momtaz. CEO emotions and firm valuation in initial coin offerings: An artificial emotional intelligence approach. Strategic Management Journal,2021,42(3),558-578. https://doi.org/10.1002/smj.3235.
This study analyzes whether and how the disruption of top management turnovers can affect not only turnover firms but also their intra‐industry rivals. It thus adds to the literature on both leader life cycles and competitive dynamics. Using a U.S. sample of 857 CEO turnovers, we find a period of relative stagnation for announcing companies following top management turnovers. We also find that intra‐industry rivals can use this period to their advantage. Semi‐structured interviews with seasoned CEOs, CFOs, and a board member from large publicly listed firms, as well as an extensive news search, support this notion. Intra‐industry rivals gain a competitive advantage that can result in positive abnormal stock returns and accounting performance. The intra‐industry outperformance is greater for forced turnovers.
Managerial summary
The departure of a company's CEO, forced or not, is usually a disruptive event for a company, as the successor must adapt to the new environment before undertaking any major strategic changes. Rivals can seize an opportunity during the transition period of the announcing company because they remain fully operational. They can thus actively exploit the relative inability of turnover companies to react by, for example, launching sales initiatives or increasing M&A activity. This interpretation is supported by internal and external evidence. Investors on average also recognize this situation, and stock prices react accordingly.
论文原文：Cord H. Burchard, Juliane Proelss, Utz Schäffer, Denis Schweizer. Bad news for announcers, good news for rivals: Are rivals fully seizing transition‐period opportunities following announcers' top management turnovers? Strategic Management Journal,2021,42(3),579-607. https://doi.org/10.1002/smj.3234.
Variance decomposition methods allow strategy scholars to identify key sources of heterogeneity in firm performance. However, most extant approaches produce estimates that depend on the order in which sources are considered, the ways they are nested, and which sources are treated as fixed or random effects. In this paper, we propose the use of an axiomatically justified, unique, and effective solution to this limitation: the “Shapley Value” approach. We show its effectiveness compared to extant methods using both simulated and real data, and use it to explore how the importance of business group effects varies with group diversification and internationalization in a large, representative sample of European firms. We thus demonstrate the method's superior accuracy and its usefulness in asking and answering new questions.
Managerial Summary
A key contribution of strategic management research to managerial practice is identifying drivers of firm performance that operate at firm, corporation, industry, and national levels. A branch of this research measures the relative importance of factors at these different levels in producing variation in firm performance, thus helping top managers focus efforts on aspects of their businesses most likely to yield performance differences. However, estimates produced by extant methods are sensitive to method used, and to modeling choices made. This paper proposes the use of the “Shapley Value” approach, which is free from such sensitivity, shows its effectiveness compared to extant methods, and uses it to explore how the importance of factors at the level of the business group varies with group diversification and internationalization.
论文原文：Dmitry Sharapov, Paul Kattuman, Diego Rodriguez, F. Javier Velazquez. Using the SHAPLEY value approach to variance decomposition in strategy research: Diversification, internationalization, and corporate group effects on affiliate profitability. Strategic Management Journal,2021,42(3),608-623. https://doi.org/10.1002/smj.3236.
